Standard 4b

Transparency

Transparency means giving your clients the right information at the time and in the right way, so they can clearly understand and take informed decisions. This includes providing transparent information on product pricing, terms and conditions.

Guidelines

This is an Excel-based tool that can be used to analyze the cost of a particular loan product. This tool helps financial service providers (FSPs) understand how various factors influence the total cost of a loan. It also enables cost comparisons between loans with different fee structures.

This brief document describes how FSPs observe the Smart Campaign Principle of transparency, current resources that exist to help providers understand and communicate their prices to clients, and information on where providers can find more information from the Smart Campaign and MFTransparency.

This paper presents Microfinanza Rating’s experiences in client protection, inspired by good practices observed in the field while conducting social ratings and client protection certifications of FSPs. It aims to promote best practices in transparency.

The tool contains five “good practice” checklists for transparent communications during promotions and sales. These checklists allow providers to check their own practices when selling individual loans, group loans, savings products, and products to clients with extra needs.

This toolkit provides guidelines for, or examples of the following documents that all providers should provide to their new clients. The Loan Contract Guidelines (page 7), Loan Contract Summary & Repayment Schedule (page 11) are particularly important to transparency.

This sample “plain language loan contract” from JSC MFO Crystal, Georgia monstrates how providers can clearly communicate loan terms to their clients. Other providers can use it to improve their own loan contracts.

This sample “plain language loan contract” from Mibanco, Peru demonstrates how providers can clearly communicate loan terms to their clients. Other providers can use it to improve their own loan contracts.

Case Studies

Muktinath’s pre-group training (PGT) manual describes the training provided to its potential clients to introduce them to the provider, its work, products and services, rules, the importance of credit discipline and the benefits of the group mechanism. The PGT Manual also helps loan officers facilitate the training in a way which is both motivational and appropriate to potential clients’ capacity. Written by the CMF Nepal as part of the MFC SP Fund Project.